As a builder or contractor, you may have a huge stake in the building contract and any damage caused by accident may cause a major financial setback. Furthermore,the venture needs many legal approvals and organization of assets, labor, construction things and needed tools. However, even after much careful execution of plans, things may go wrong, and the possibility of some loss can always be present.
To cover the financial losses due to any unforeseen event, as a contractor or builder in real estate business, you may use construction all risk insurance policy. The ‘general construction all risk policy’ usually covers the following two kinds of losses during the construction period of the building:
- Damage to the material and structure, and
- Any loss, damage or physical damage caused to a third party.
The constructional all risk insurance seems to be complete liability insurance scheme. However, there are many things that are excluded from the policy as well. Usually, exclusions differ from one scheme to another;there are many essential conditions that are firmly debarred. Listed below are some of the main exclusions that a person must be aware of before selecting construction all risk insurance:
- The insurer can refuse claims associated with the loss, harm, liability arising because of –War, riots, revolution, rebellion, defiance, civil commotion, conspiracy,etc.
- Radioactive contagion, nuclear reaction and nuclear radiation
- Halt of work
- Willful act of carelessness
- Anything related to terrorism
- Losses happening because of the surplus presented in the schedule
- Known damages at the time of picking up the inventory
- Standard wear & tear
- Steady deterioration or any loss occurred because of the atmospheric setting
- Collapse of the edifice (building structure) because of defective design
- Any loss in the edifice because of faulty or bad quality material
- Damage of records, drawings, accounts, money, stamps, proof of the debt,etc.
- Penalties arising due to disobedience of law, non-adherence to terms & condition of the venture
- The operational cost incurred by the person in mending or replacing some material or damaged building part.
Under no situation, the person who has taken the policy (head contractor, assistant contractor, owner of the property or the party funding the venture) can divulge, offer or assure the payment of insurance to the third-party without the permission of the insurer. All matters linked with the defense and agreement must be brought to the knowledge of the insurance firm. This is vital for a smooth claim settlement process.
There are some additional covers that a contractor or builder can purchase along with the main policy:
- The amount required for the removal of debris
- Charges arising because of any damage to surrounding property
- Damage of the edifice because of strike, civil disorder & Terrorism
- Any extensive maintenance work
- Loss of damage due to refinement or reinstatement work
Construction ventures are capital intensive tasks, and therefore contractors, or those concerned with the venture must take complete coverage that gives them utmost protection in case of an unforeseen situation. A good policy will not only safeguard the property but will also provide you the essential support that you will require at the time of need. Various agencies now days offer various top class insurance policies with different benefits.
It is suggested to do a thorough research of all the policies before picking the one that suits you. Many other insurance policies like factory and warehouse, motor fleet etc. are also becoming popular. Insurance brokers like SecureNow play a major role when it comes to offering information about different policy providers. Not just this, brokers provide additional benefits like smooth processing and constant support as well. So, be prepared for any sudden crises and opt for best policy now.